Australia's poor standing is blamed on its reliance on greenhouse-intensive exports, cars and coal-based electricity.

In terms of being ready to play its part under a pact to limit warming to 2 degrees, it slips down the list to 16th.

''The largest turnarounds in carbon productivity are required by Australia, Turkey, Russia and Saudi Arabia,'' the report says.

''The longer these countries take to achieve these turnarounds, the more costly the eventual transition will be.''

Commissioned by European think tank E3G and Australia's Climate Institute, the report is timed to pressure Kevin Rudd and other leaders heading to the US next week for a G20 meeting and UN climate summit. Both are seen as crucial to hatching a climate deal to be signed in Copenhagen in December.

The report is backed by British climate economist Lord Nicholas Stern, whose 2006 report for the British Government was the first to explain the economic impact of failing to tackle climate change.

Its findings include:

- Leading nations have significant ground to make up to show they can live up to a substantial climate treaty, if one can be agreed on. Only two nations - Mexico and Argentina - are on track to play their part in giving the world a chance of avoiding 2 degrees of warming. China, South Africa and Germany are close.

- Australia needs to double its carbon productivity - the GDP generated for each tonne of carbon dioxide it emits - to play its part in a substantial treaty.

- Economic growth does not have to suffer under a carbon price. Germany, South Africa and Mexico have shown they can decouple growth from emissions.

- France, Japan, Britain, South Korea and Germany are best placed to capitalise on a global carbon price.

The Climate Institute said the report showed claims that taking action on climate change would damage international competitiveness were ''outdated and backward''.

It said the world was already moving to low-carbon products. For the first time, investment in clean energy last year outstripped investment in fossil fuel technology.

Institute chief executive John Connor said the report underscored the urgency of Australia introducing an emissions trading scheme and not offering extra compensation for big-emitting industries.

''It also highlights the importance that world leaders … increase financial and investment incentives for clean technologies in developed, but particularly developing, countries,'' he said.

In a preface to the report, Lord Stern says the global economic recovery is an ideal opportunity to cut emissions. ''Countries which don't seize this opportunity will undermine their future competitiveness,'' he says.